Politics Is War By Other Means

Reading Time: 3 minutes

WAR IS A MERE CONTINUATION OF POLICY BY OTHER MEANS.

Good old Clausewitz. Best book on war ever written. (The Art of War was about something else.)

But the 21st century has reversed his famous line. Politics has become war by other means.

Germany has a history of waging wars of conquest. World War I. World War II. The Greek bailout. As Stratfor’s George Friedman explains:

And with this, the Germans did something they never wanted to do: resurrect fairly unambiguously the idea that Germany is the sovereign and dominant nation-state in Europe, and that it has the power and the will to unilaterally impose its will on another nation. Certainly the niceties of votes by finance ministers and prime ministers were adhered to, but it was the Germans who conducted the real negotiations and who imposed their will on Greece.

In exchange for more debt, Germany ordered Greece to surrender its sovereignty and €50 billion in assets to be sold at auction. Greece must also “cut pensions, increase value added tax, clamp down on collective bargaining agreements and put in place quasi-automatic spending constraints.”

To be honest, those are all necessary reforms that will help Greece in the long run. Greece has operated on the edge of Marxism since the 1950s, and it finally ran out of other people’s money.

Still, Germany’s paternalism bothers me. And it makes a mockery of the idea that Eurozone members retain their sovereignty.

Had Greece exited the Eurozone, all those reforms, and more, would have happened anyway. They had to. Socialism doesn’t work, never has, and never will. Had Europe simply sent Greece adrift in the Aegean Sea of financial failure, the Greeks would have come to grips with their 60 years of fiscal irresponsibility. On their own.

It would have sucked, but it would have been a sucking of their own making. You know, like a sovereign country.

Instead, Greeks have someone else to blame: Germany. Because Germany fed Greece’s voracious appetite for debt for a decade and a half, and Germany can’t stomach taking a loss on bad loans. Will the Greeks learn their lesson? Or will they blame their woes, not on their own socialism, but on German hegemony?

Greece is no longer sovereign. It has been conquered. Not by an invading army, but by a European collection agency. Clausewitz defined war as:

WAR THEREFORE IS AN ACT OF VIOLENCE INTENDED TO COMPEL OUR OPPONENT TO FULFIL OUR WILL.

Take out the violence, and Clausewitz might have described Sunday’s Eurogroup meeting. Not only Greece, but France and other Eurogroup partners were compelled to to fulfill Germany’s will.

At best, Greece is an indentured servant-state. For decades, the fruits of Greek labor will feed northern Europe. What’s left over, the Greeks may keep. Like serfs on a Medieval manor.

The moral of the story for America: eschew socialism or you’ll end up a serf to a foreign lord. For the Eurozone, a question: is Germany the only sovereign among you?

I’ll end with more from George Friedman:

But in making these moves, Germany crossed two lines. The lesser line was that France and Germany were not linked on dealing with Greece, though they were not so far apart as to be even close to a breach. The second, and more serious, line was that the final negotiation was an exercise of unilateral German power. Several nations supported the German position from the beginning — particularly the Eastern European nations that, in addition to opposing Greece soaking up European money, do not trust Greece’s relationship with Russia. Germany had allies. But it also had major powers as opponents, and these were brushed aside.

Stay tuned. This isn’t over.

Chili Palmer

Reading Time: 2 minutes

The greatest mob movie of all time was Get Shorty. (Please, don’t argue.) The whole movie revolved around this exchange:

Ronnie Wingate: Excuse me bro’, but who the fuck are you?
Chili Palmer: I’m the one tellin’ you how it is…

Last Sunday, Greece was Chili Palmer. A few days later, Angela Merkel is.

 

Funny how things change.

You probably heard that Greece’s Prime Minister called for a referendum on the troika’s terms. And the PM encouraged Greeks to vote no. And the Greeks did—by a whopping 61-39 laugher.

Turns out, though, Prime Minister Tsipras was sort of bluffing. He expected Greeks to vote Yes no matter what he told them. In other words, he doubted his own mandate.

He hoped Greek voters would accept the Troika’s terms, reject his leadership, and make the whole thing somebody else’s problem.

When Greece followed Tsipras’s advice and rejected the offer, Tsipras fired the mastermind of the strategy, Marxist game theorist Yanis Varoufakis. Varoufakis rode is motorcycle into the sunset.

As last Monday morning dragged on, Tsipras turned his blinking eye toward Germany and . . . and needed to change his pants. In the North stood Europe’s Chili Palmer who goes by the name Angela Merkel—pronounced, like her policies, with a hard “G.”

Tsipras offered to accept the Troika’s terms—the ones his people had just overwhelmingly rejected. Merkel spake “nein!”

Now, Germany, Finland, and other Eurozone members are laying out terms Greek can’t accept. The alternative is a five-year leave of absense from the Eurozone—a term Greece has little choice but to take. As the Wall Street Journal puts it:

Sunday’s statement on Greece by eurozone finance ministers will go down as one of the most brutal diplomatic démarches in the history of the European Union, a bloc built to foster peace and harmony that is now publicly threatening one of its own with ruination unless it surrenders.

Greece’s new best friend, Vladimir Putin, waits in the wings with oil and gas and gold on ships ready to dock in Greece’s warm-water ports.

The Eurozone isn’t an economic venture: it’s a loan-sharking racket. Europe happily fed Greece’s voracious appetite for debt for over a decade, knowing full well Greece would never make good on the loans.

Why? Exports. The same reason our own establishment freaks out over the Export Import Bank.

Since the creation of the Euro, Germany has pressured European banks to make risky loans to Greece, Italy, Portugal, and other countries. The loans allowed the southern countries to buy German goods. The scheme worked remarkably while while it lasted:

clipped from http://www.zerohedge.com/news/2015-07-12/latest-out-europe-pretty-steady-level-shittiness

Now, Europe owns Greece and doesn’t want it.

What happens next? Who knows. But everyone has learned never to borrow money from Germany or the European Central Bank. Or the IMF, for that matter. Never. Any alternative is better.

I can’t imagine this ends well for Greece, Europe, or the world.

Chili Palmer: Look at me. What I’m thinking is, ‘You’re mine. I fuckin’ own you.’ But what I’m not doing is feeling anything about it one way or the other. You understand? You’re not a person to me, you’re a name in my collection book, a guy who owes me money, that’s all.

I wonder if John Travolta will play Merkel in the movie.

China Is Crashing and Greece Is Spinning Out of Control

Reading Time: 2 minutes

The world is even more fragile than it was in 2007. The big banks are bigger. Aggregate bank assets are concentrated in fewer hands. The bank derivatives books are much larger. Market liquidity is worse.

James Rickards, The Daily Reckoning

Well, ain’t that just dandy?

And it’s undeniably true. We were told that the 2008 financial meltdown was caused by entities that had grown too large: banks, insurance companies, corporations, derivitives. They’d grown too big to survive and too big to fail.

Their investors and lenders were wealthy and connected. They used their connections to nudge politicians to transfer their losses from private companies and individuals to government balance sheets. Governments, after all, can collect debts at the point of a gun while private companies are limited to annoying debt collection calls.

To cover their tracks, politicians passed ridiculous laws written by the very failed business people who caused the problem in the first place: big banks, Wall Streeters.

And the result has been predictable. As James Rickards reminds us:

  • The big banks are bigger
  • Bank assets are concentrated in fewer, more powerful hands
  • Derivitives are bigger and more opaque
  • Liquidity is worse
  • And the central banksters are out of ammunition

Obama’s State Department is busy giving away the farm to Iran in pursuit of a “legacy.” But Obama’s legacy will be this: he left the world less stable, less democratic, less equal, and less optimistic than he found it.

We have a hell of a mess to clean up. It will likely consume the rest of our lives. At least, the rest of the lives of Boomers and Gen Xers. Millinnials may enjoy a brighter future after the storm.

Left vs. right, liberal vs. conservative, Democrat vs. Republican are all false dichotomies.The real fight today is Elites vs. Us.

China is crashing.

Greece is out of control.

Buckle up. We live in a world more fragile than it’s ever been. And fragile things break.

There are so many fragile things, after all. People break so easily, and so do dreams and hearts.

― Neil Gaiman, Fragile Things: Short Fictions and Wonders

Feature image by djoe clipped from http://djoe.deviantart.com/art/Human-fragility-21891471

Greece Rejects Central Banksters

Reading Time: 2 minutes

Greece has voted to reject the “troika’s” bailout terms. The people of Greece said “no” to the central banksters who encourage sovereigns to enslave themselves under mountains of debt.

The Greeks showed remarkable courage and resiliency, and their example could disrupt the entire international banking system. Tyler Durden at Zero Hedge:

The Greek people have spoken and they said “OXI”!
So congratulations Greece: for the first time you had the chance to tell the Troika, the unelected eurocrats, and the entire status quo establishment, not to mention all the banks, how you really felt and based on the most recent results, some 61% of you told it to go fuck itself.

 

At a minimum, the Greferendum has destroyed the dream of the Euro. Via Fox Business:

If confirmed, the result would also deliver a hammer blow to the European Union’s grand single currency project. Intended to be permanent and unbreakable when it was created 15 years ago, the euro zone could now be on the point of losing its first member with the risk of further unraveling to come.

Indeed. But the implications of the Greek referendum will reverberate much farther than the Mediterrean or the Eurozone.

  • China’s sham stock markets, already having fallen 30 pecent in three weeks, could crash another 50 percent this week.
  • Spain, Italy, and Ireland will likely demand restructuring of their debt.
  • In the US, sensible people who’ve been warning of the dangers of trying to borrow our way to prosperity have new leverage and a bold example in demanding an end to government-by-credit-card.
  • The Golden Age of the Central Bankster will come to crashing close

And, as former Reagan economist David Stockman put it:

None of the governments which foisted these obligations on Greece will survive a blanket default. The more likely scenario is that the successor governments—–almost certain to be anti-EU—- will disavow the guarantees undertaken by the EFSF and demand haircuts from the underlying bank and bond holder claimants. Stated differently, a Greek default on its $150 billion of EFSF funding would trigger a domino effect back to the status quo ante.

The coming weeks will change the world. Greece will suffer in the short run but it will lead the world into the post-Bankster future. Call it “redemptive suffering.” The last nation to dive into the abyss will suffer the most and lose the most. The best economics writer alive, Ben Hunt, put it this way:

If Greece votes to reject the proposal, then either the game resolves itself within the stable Nash equilibrium of a shamed Euro status quo and a triumphant Greece (if the ECB and EU decide to cave to some form of the original Greek proposal), or we enter the death spiral phase of a game of Chicken, as all parties start to talk about how they “have no choice” but to crash their cars. That latter course is the far more likely path, I think, given how the various Euro Powers That Be are already positioning themselves. It’s all so very 1914-ish. Draghi’s cap on bank-supporting Emergency Liquidity Assistance (ELA) is the modern day equivalent of Czar Nicholas II’s troop mobilization. Good luck walking that back.

Congratulations and thanks to the Greek people. The rest of us better buckle our seatbelts.

Human Decay in the Age of Obama

Reading Time: 2 minutes

In 47BC, Julius Caesar assumed dictatorial power in Rome.  He instituted “reforms” that transformed the Republic into the Empire. In the process, he became a dictator.  Rome’s decent into oblivion began. In 44BC, seeing the damage Caesar’s tyranny and reforms, three men removed Caesar from power by the method of the day.

History moves faster now than it did 2,000 years ago. A megalomaniacal leaders bent on fundamentally transforming a nation can do remarkable damage in the blink of an eye. It’s not just the economy and institutions that rot from Obama’s sort of transformation, but the people themselves.  Their souls erode, leaving hollow, bitter creatures that scratch at each others eyes.

Peggy Noonan wrote about the effects of Obama’s dreams on the small country of Greece.  She included this long quote from Michael Lewis from his article in Vanity Fair:

The Greek state was not just corrupt but also corrupting. Once you saw how it worked you could understand a phenomenon which otherwise made no sense at all: the difficulty Greek people have saying a kind word about one another. . . . Everyone is pretty sure everyone is cheating on his taxes, or bribing politicians, or taking bribes, or lying about the value of his real estate. And this total absence of faith in one another is self-reinforcing. The epidemic of lying and cheating and stealing makes any sort of civic life impossible.

Wretched. 

Yet it’s where America and Americans now aim: the shoals of soulless dissipation, turned by government handouts (stolen from us first) into angry, cynical vipers. Free isn’t free when it costs you your humanity.

November 2 is your chance to stop the erosion.  We’re at 4512 Hampton Ave. in St. Louis Hills through the election.  We’re there to stop Greece from happening in America.  We offer no guarantees except your rightful place in history.

Terrific: U.S. Pumping $$ into European Economic Abyss

Reading Time: 2 minutes

Break out the Depression Glasses to toast the Obama Administration’s latest foray into economic disaster. Just posted on WSJ.com:

BREAKING: The Federal Reserve and other central banks open a credit line to send dollars to Europe to ease debt crisis.

Yes, folks. Your taxes are going up, your kids are going deeper into debt, to bail out lazy, overpaid, spoiled Greek socialists. Thank your president.

The U.S. move follows a panicked decision by EU leaders to pump hundreds of billions of $$ into failing socialist economies in Europe to avert a global economic collapse.

But the scheme may not work.

The problems in Greece, Spain, and Portugal (and Japan, Ireland, and elsewhere) result from too much government debt and too much government regulation.  The countries offering to fund this $650 billion emergency fund are already deeply in debt.  In other words, this is just the latest attempts by socialist governments to borrow their way to prosperity.

In 2008, governments moved debt from underneath Shell A to underneath Shell B.  Now, they’re moving debt to Shell C, the last shell in the game. It looks to me that governments around the world are in an all out panic.  They see the shell game crumbling.  They’re running out of tricks.

Related news stories highlight the problem. Bloomberg reports that banks no longer trust each other, which is driving Credit Default Swaps (CDS) to record levels.

The interest rate that financial companies charge each other for three month loans in dollars is the highest since August, while traders are paying record amounts to hedge against losses in European bank bonds. Yields on all types of corporate bonds rose last week by the most relative to government debt since Lehman Brothers Holdings Inc.’s bankruptcy in September 2008, according to Bank of America Merrill Lynch indexes.

Moody’s, the debt rating organization, says that a Greek-style crisis could his America as soon as 2013, according to Investors.com (HT Drudge Report).

But under more adverse scenarios than the CBO considered, including higher interest rates, Moody’s projects that debt service could hit 22.4% of revenue by 2013.

“While we see limited risk of a U.S. sovereign debt downgrade in the next 2-3 years, beyond that we cannot be so certain,” wrote Societe Generale’s economics team in a recent report.

The Tea Party happened because ordinary Americans sensed something horribly foul in the air steaming out of Washington, DC.  That acrid smell was socialist-driven debt.  And it’s only gotten thicker since then. The White House is imposing policies designed to weaken and break small businesses and to socialize large businesses until there is nothing left but government.

Stop them.  Stop them now. Stopping them is why we created Ensuring Liberty.  Join us today.